Structure Tone, a global construction services firm with annual revenues of over $3 billion, will pay a $55 million forfeiture after pleading guilty to felony charges. The lawsuit in the State Supreme Court, in Manhattan, alleged that the New York-based firm had its subcontractors, including electrical, drywall, and plumbing subs, inflate bills for the company's clients. The work in question included jobs for Bank of America, Moody's, Proskauer Rose, Bloomberg, and other customers from 2005 to 2009.
A report in the New York Times indicates that Structure Tone pled guilty to one count of falsifying business records in the first degree, a felony. David Szuchman, the chief of investigations for the district attorney, says Structure Tone became aware of the investigation in 2010 and put new safeguards in place; Szuchman's office continues to monitor the firm's business records and will do so for three years.
When functioning as a CM, Structure Tone asked subs to put unnecessary contingencies in an addendum called "Rider B," which was unknown to Structure Tone's clients. Execs also asked for discounts from subs on lump sum contracts, when the firm was working as a GC.
The company issued a statement as follows:
“The record-keeping issues, which form the basis of this agreement, date back to the period 2005 to 2009, and we have fully cooperated with authorities from the beginning. The financial position of our company — which generates $3 billion annually in revenue — continues to be strong. Long before this process began, we strengthened our compliance protocols to improve transparency.”
Related Stories
| Jun 12, 2014
Austrian university develops 'inflatable' concrete dome method
Constructing a concrete dome is a costly process, but this may change soon. A team from the Vienna University of Technology has developed a method that allows concrete domes to form with the use of air and steel cables instead of expensive, timber supporting structures.
| Jun 11, 2014
David Adjaye’s housing project in Sugar Hill nears completion
A new development in New York's historic Sugar Hill district nears completion, designed to be an icon for the neighborhood's rich history.
| Jun 11, 2014
Bill signing signals approval to revitalize New Orleans’ convention center corridor
A plan to revitalize New Orleans' Convention Center moves forward after Louisiana governor signs bill.
| Jun 11, 2014
5 ways Herman Miller's new office concept rethinks the traditional workplace
Today's technologies allow us to work anywhere. So why come to an office at all? Herman Miller has an answer.
| Jun 11, 2014
Esri’s interactive guide to 2014 World Cup Stadiums
California-based Esri, a supplier of GIS software, created a nifty interactive map that gives viewers a satellite perspective of Brazil’s many new stadiums.
| Jun 10, 2014
Gaudi’s famed cathedral on ice: Dutch students to construct 132-foot ice replica of Sagrada Familia
"Sagrada Familia in Ice" will be built with a mixture of wooden fibers and plain ice that is three times stronger than ice.
| Jun 10, 2014
Built-in balcony: New skylight windows can fold out to create a patio
Roof window manufacturer Fakro offers a skylight window system that quickly converts into an open-air balcony.
| Jun 9, 2014
10 projects named 2014 AIA Small Project Award winners
Yale's funky new Ground café and a pavilion made from 53,780 recycled plastic bottles are among the nation's best new small projects.
Smart Buildings | Jun 8, 2014
Big Data: How one city took control of its facility assets with data
Over the past few years, Buffalo has developed a cutting-edge facility management program to ensure it's utilizing its facilities and operations as efficiently, effectively, and sustainably as possible.
| Jun 6, 2014
Must see: Can a floating city offset urban population growth in China?
AT Design Office has proposed a design for a floating city to offset increasing urban populations in China. To create the new city, a 10-square kilometer island would be made out of prefab blocks.
